Monday, April 27, 2009

Social Echo and Rational Economics

In the construction of economic theories, from Plato and Aristotle to Adam Smith, Karl Marx, John Maynard Keynes and beyond, assumptions about human nature have taken their toll to the detriment of effective predictability of markets and systems. The need to predict, plan and reason about systemic behaviour, too strong to admit postponement, overrun the obvious lack of knowledge about the human animal. Economics thus framed new ideologies, such as Marxism or capitalism, which in turn guided scientific exploration. An example of ideological framing causing a sociological paradox is eugenics. Since Galton and Darwin, eugenics has been the logical projection of evolutionary theory applied to humans. But although the idea was accepted in the beginning by liberals and leftists, it became an abomination following its corruption by the Nazis. Since the end of WWII whenever it resurfaces it is being slammed down by an almost hysterical reaction from academia and the Press (James Watson being a recent victim of this). And yet the idea persists, albeit dressed in other hides; in socialist-inspired models of egalitarianism, in laws that regulate abortions to the detriment of the middle classes, in genetics research (cloning in particular), and in educational systems. Eugenics makes one huge assumption: that by selecting for higher intelligence humanity will become, in a few generations, less violent, more altruistic and wiser. And yet, the correlation between higher intelligence and the desired attributes of peace, social cohesion and wisdom is a weak one. It smacks of wishful thinking and cultural bias. Human beings are highly intelligent animals, not angels, not creatures that stand apart from the rest. We are apes, and when push comes to shove we act like ones too – regardless of our intelligence, or good manners. War is the most obvious testament to our innate cruelty. If anything, our ingenuity seems to have been invested more in engineering war machines that in anything else.Recent discoveries in neuroscience promise to shed much-needed light in what constitutes a human being. Deciphering the unconscious circuitry would be a task of monumental proportions dwarfing the Human Genome Project by several degrees of magnitude. Alas, the result - if successful - will be of limited use. As in the case of genes, interactions in the whole seem to play a role more important than the interacting parts alone. The infusion of neuroscience into sociology and economics is a welcome development. Nevertheless, owing to the infancy of neuroscience it should be expected that social framing will once again take the upper hand, leading to new “realistic” economic theories that reason the animal inside us. Once more, experts will reason about social systems forgetting that human activity is diffused and dominated by unconscious, autonomic, neuropsychological systems that enable people to function effectively without always calling upon the brain's scarcest resource– attentional and reasoning circuitry. To reason about non-reason is a paradox that we cannot escape. We can only understand an echo of what the human society is truly all about. The dilemma will always be how much we want to believe in it.